Government reduces windfall tax on diesel and ATF, increases levy on domestic crude oil
By Team Newsable | First Published Aug 3, 2022, 10:15 AM ISTThe tax on domestically produced crude oil has been raised from Rs 17,000 to Rs 17,750 per tonne, affecting producers such as ONGC and Vedanta Ltd.
The government reduced the windfall tax on diesel and ATF while raising the duty on domestically produced crude oil in response to lower international petroleum product prices.
While the tax on diesel exports was reduced from Rs 11 to Rs 5 per litre, the tax on jet fuel (ATF) was eliminated following an official notification issued on Tuesday evening.
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The export of petrol will continue to be tax-free.
The tax on domestically produced crude oil has been raised from Rs 17,000 to Rs 17,750 per tonne, affecting producers such as ONGC and Vedanta Ltd.
On July 1, India became the first country to levy windfall taxes on energy companies, joining a growing list of countries. However, international oil prices have since fallen, eroding profit margins for producers and refiners.
On July 1, export duties of Rs 6 per litre (USD 12 per barrel) on Petrol and ATF and Rs 13 per litre on diesel were imposed (USD 26 a barrel). A windfall tax of Rs 23,250 per tonne on domestic crude production (USD 40 per barrel) was also charged.
Following that, on July 20, the Rs 6 per litre export duty on Petrol was repealed, and the tax on the export of diesel and jet fuel (ATF) was reduced by Rs 2 per litre to Rs 11 and Rs 4, respectively. The tax on domestic crude was also reduced to Rs 17,000 per tonne.
Following a decrease in refinery cracks or margins, the export tax on diesel and ATF has now been reduced. However, the tax on domestically produced crude oil has been raised in response to a slight increase in international crude prices.
(With inputs from PTI)
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